Gigantic wooden tanning drums filled with 60,000 litres of liquid and skins rumble continuously like relics from the industrial age.

But while sheepskin tanning might seem an ancient art, the machines that clean, soak and trim the skins are highly sophisticated.

"You can't buy these machines in Australia any more," says the manager of the tannery, Zoran Stanojcic, as he steps me through the 38-stage process.

"If you had to start from scratch now, I don't think you'd be able to do it, or you'd have to have a lot of money."

The warehouse, located in Laverton just west of Melbourne holds the last sheepskin tannery in the country. The company's founder, Roman Fishman, says when he started making ugg boots with his wife Luda, after fleeing Soviet Russia 32 years ago, there were around 70 tanneries in the country. There are only a handful left and he thinks theirs is now the only dedicated sheepskin tannery in Australia.

"I started becoming a tanner because nobody could supply me with the skins and so I had to do it myself," says Mr Fishman who inspects the sheep every morning himself to pick the highest quality fleeces.

"I see them in the morning alive and at lunch time the skins come to us and we put them in to the process."

The tannery processes around 150,000 skins a year, mainly to turn into ugg boots. But Roman Fishman says he would happily produce more if he could sell them.

"We have a much bigger capacity...but we are under pressure from low grade skins coming from China," he said.

"It's very hard to compete with them."

The ugg boot side of the business is overseen by managing director Lena Fishman who sells under the label Ugg Australia. While there are other ugg boots made domestically, all other manufacturers use sheepskins tanned overseas.

Despite the challenges of higher labour costs, Lena Fishman says her boots are only 10 per cent more expensive than foreign-made products and sell cheaper than some Australian brands.

"It's about reacting to market, it's about the loyalty that people know because they've tested one of those products that falls apart," she explains.

But it hasn't been easy. The company spent eight years in court fighting to retain their name after an American company, Deckers Outdoor Corporation, objected to their use of the term Ugg Australia, which Deckers have trademarked in the US and several other countries. On that front, Lena Fishman was successful, but she says she faces an even larger challenge of competing with imported products that are rebadged as Australian-made.

"We are starting to have our reputation ruined over the marketing and the lack of legal action over these products," says Ms Fishman, who prides herself on producing the only fully Australian-made ugg boots in the world.

Lena Fishman says that the lack of action taken by Australian Made, the organisation which overseas the use of the Australian Made logo, has led to more manufacturers heading overseas.

"In the last ten years, we have watched real manufacturers move offshore because the laws are so loose, one follows the other and it's a race to the bottom," she said.

The consumer watchdog, the ACCC, has taken action against ugg boot companies falsely claiming to manufacture in Australia. Earlier this month, Queensland company Koala Jack received a court order requiring it to stop using the Australian Made logo after its products were found to be manufactured in China. But Lena Fishman says that kind of action hardly touches the surface.

"There's been no legal action, there's plenty of product with no country of origin and no factories have been closed," she said."It ruins the reputation of Australians world-wide."

Australian Made, for its part, accepts that the organisation is facing an uphill battle when it comes to products being falsely labelled as made in Australia.

"If we don't monitor the claim made in Australian, then ... the companies that are going to make product in Australia will most likely have a price penalty in the marketplace," said Australian Made chief executive, Ian Harrison.

Mr Harrison says every claim of misuse of the Australia Made logo is investigated. But only 1 per cent of companies using the logo are audited each year. Mr Harrison concedes that more regulation is required from both the ACCC and Australian Made if consumers are to have confidence in the Australian Made logo.

"We'd like it to be more than 1 per cent, but it's a question of resources," said Mr Harrison, who says the ACCC is also constrained by a lack of resources.

Despite the challenges, Roman Fishman is determined to ensure that the company he started 32 years ago with $60 and a few second-hand sewing machines will continue to manufacture in Australia.

"We have to survive this industry because if we don't save this industry, what will be left for our children?" he asks.

If the passion and conviction of his daughter, Lena Fishman, is anything to go by, fully Australian-made ugg boots will be around for some time to come.

"We will continue to do what we do and I know the general public would be behind us," she said.